AVS Property Pty Limited ACN 094 311 645 v Western Retirement Village Management Limited

REASONS FOR JUDGMENT 1 There is before the Court an application for an extension of time within which to appeal from Orders made by Finkelstein J in proceeding No VID 590 of 2006. On 14 November 2008, his Honour ordered: '1. The Mews receiver pay to AVS Property Pty Ltd out of the proceeds of the sale of the land known as the Mews land which is held in an account maintained by the Mews receivers (account) the interest which has actually accrued from 17 March 2008 to 22 September 2008 on the principal debt of $4,100,282.64 (together with any interest which has accrued on interest).

2. The costs of the parties be paid out of the moneys in the account.'

2 His Honour, on the same date, published reasons for those orders which were communicated, at least to the present applicant, AVS Property Pty Limited ("AVS"), by email. A question was raised by Mr Vaughan of Counsel for the Mews receivers as to what action might have been taken, or what communications might have occurred, between the solicitors for AVS and the officers of that company between the publication of the orders and a payment of interest which was made on 20 November 2008. 3 However, after being apprised by Mr Martindale SC for the applicant of the terms of an email in which the judgment had been communicated to AVS, and a diary note made by the solicitor for AVS of the response from Mr Wunsch, the Group Company Secretary of the group of companies which includes AVS, Mr Vaughan has very properly conceded that there is no basis on which it can be said that there are not special reasons which would justify the grant of an extension of time in this matter. 4 That leaves the Court, as I understand the authorities, to resolve whether the proposed appeal has a reasonable prospect of success. Again, Mr Vaughan pointed to the fact that a finding made by Finkelstein J, in his reasons of 14 November 2008, is supported by findings of fact made by his Honour in earlier proceedings between the same parties. The finding of fact in the reasons of 14 November occurs at [7] of those reasons where his Honour said; 'In the case at bar the second mortgagees made it clear that they would not discharge the second mortgage at the settlement unless AVS received the whole of the proceeds. It was for this reason that the vendor, Western Retirement Village Management Pty Ltd (in liq), took proceedings to obtain the discharge of the second mortgage and to have determined what was due under that mortgage. The money was paid into the receivers' account to protect AVS in the event it could establish a claim.' 5 The passages in the earlier judgments to which Mr Vaughan referred, occur, first, in Australian Securities and Investment Commission v GDK Financial Solutions Pty Ltd (in liq) (No 3) (2008) 246 ALR 580, a judgment delivered 4 April 2008. In the course of those reasons, his Honour said at 581 [3]; '… As regards the second mortgagees [including AVS], they had refused to discharge their mortgage unless one of the mortgagees, AVS, was paid the balance of the proceeds of sale, which happens to be less than the amount which it claims is secured by the second mortgage. The quantum of its claim is contested.' 6 In the second set of reasons for judgment to which Mr Vaughan referred, that being those in Australian Securities and Investment Commission v GDK Financial Solutions Pty Ltd (in liq) (No 4) (2008) 169 FCR 497, which were published on 12 June 2008, his Honour said, at 499 [3]; 'The Mews land, which was registered in the name of WRVM, was the only substantial asset of the scheme, no village ever having been constructed. The receivers took possession of the land and found a purchaser to whom, with court approval, WRVM sold the land. As AVS and Rental Fleets refused to discharge their mortgage, it was necessary to make an order to that effect so that the sale could be completed. The order was made on the application of Messrs McMaster and Mentha: Australian Securities and Investment Commission v GDK Financial Solutions Pty Ltd (in liq) (No 3) (2008) 246 ALR 580. The receivers were also ordered to hold the net proceeds of sale pending the resolution of all claims on those proceeds. 7 It will be noted that his Honour does not set out the evidentiary basis for any of his findings that AVS refused to discharge its mortgage, and Mr Vaughan, again very properly, accepted that the case proposed by Mr Martindale to be advanced on behalf of AVS, that the finding is not supported by available evidence, is open to AVS. However, Mr Vaughan made it clear, as did Ms Hogan-Doran for Peter Hastings Warne, the seventh respondent in VID 590 of 2006, that they were each concerned to preserve to their respective clients the right to support the findings made by his Honour by whatever evidence might be available to them on the appeal if the present application be granted. 8 I am satisfied, in the circumstances, that there is a reasonably arguable prospect of success on the proposed appeal. Because I have not been apprised of all the evidence bearing on the question to which I have referred, it would be undesirable for me, in the course of these reasons, to say any more than that. However, I consider it an appropriate exercise of the Court's discretion to grant the extension of time which has been applied for. 9 In the light of submissions by Counsel as to the appropriate procedural directions to be made should an extension of time be granted, I shall order as follows; 1. That time for appeal by AVS Property Pty Ltd ("AVS") from the orders of Finkelstein J of 14 November 2008 made in action VID 590 of 2006 be extended to 20 May 2009.